Sir John Major has claimed Rupert Murdoch demanded his government change its policy on Europe or his papers would oppose him at the 1997 general election.

The former Conservative prime minister told the Leveson inquiry on Tuesday that Murdoch delivered the ultimatum at a private meeting with the News Corporation founder on 2 February 1997, three months before the election in which the Tories lost heavily to New Labour.

Major's claim appears to contradict Murdoch's own evidence to the inquiry. Murdoch told Leveson on 25 April that "I have never asked a prime minister for anything."

In his witness statement to the inquiry Major said he assumed Murdoch meant that "he has never asked for anything that would benefit him personally or his company". "In my very limited contact with Mr Murdoch his statement is on a strict interpretation literally true," he added.

"Certainly he never asked for anything directly from me but he was not averse to pressing for policy changes. In the runup to the 1997 general election in my third and last meeting with him on 2 February 1997 he made it clear that he disliked my European policies which he wished me to change.

"If not, his papers could not and would not support the Conservative government. So far as I recall he made no mention of editorial independence but referred to all his papers as 'we'.

"Both Mr Murdoch and I kept our word. I made no change in policy and Mr Murdoch's titles did indeed oppose the Conservative party. It came as no surprise to me when soon after our meeting the Sun newspaper announced its support for Labour."

News International issued a statement in response to Major's comments at the inquiry on Tuesday. "News International titles did not act in unison in the 1997 election. The Sunday Times supported John Major, the Times was neutral, and the Sun and the News of the World supported Labour," a spokesman said.

Asked by Robert Jay QC, counsel to the inquiry, why he had not given more details about the exchange in his autobiography, Major said: "I haven't talked about this conversation at any stage over the past 15 years but now I am under oath. I was asked the question and I have answered the question."

Major said it was a private dinner also attended by his wife and Elisabeth Murdoch. He added that Murdoch wanted Britain to withdraw from the European Union, but he made it clear at the meeting that was not going to happen.

He said he remembered the meeting because it was not very often that someone made such a direct demand of a prime minister and linked it to their organisation's support.

It was one of three meetings that Major had with Murdoch during his seven years in Downing Street, but he said he could not remember details of the other two, in 1992 and 1993. During his evidence to the inquiry Murdoch also said he could recall the 1997 dinner but not other conversations with Major.

Major said he "saw at first hand Rupert Murdoch's relationship with Margaret Thatcher but did not have, nor wish to have, a similar relationship".

"I recognised Mr Murdoch's remarkable success in business but did not admire much that was in his newspapers, nor his methods or his political philosophy," he added.

Major also told the inquiry he thought it was an "oddity" that a foreigner who cannot vote in this country like Murdoch should be allowed to have such a dominant position in the British media and that the Sun has "lowered the tone" of the discourse on public life.

"I do think parts of his press, parts of his media empire have lowered the general quality of the British media. I think that is a loss," Major said. "I think it is evident which newspaper I am referring to. I think they have lowered the tone. I think the interaction that there has been with politicians has done no good either to the press or to the politicians.

"I think the sheer scale of the influence he is believed to [have] whether he exercises it or not, is an unattractive facet in British national life, and it does seem to me an oddity that in a nation which prides itself on one man, one vote, we should have one man, who can't vote, with a large collection of newspapers and a large share of the electronic media outlets.

In his witness statement, Major wrote: "Sole proprietors have enormous influence. One man one vote is a principle we have long accepted. One man, many newspapers (plus satellite television ownership) is a very different principle. It is important that such great power is not abused … In many ways sole proprietorship is inherently undesirable. Power without hindrance is bound to be poorly exercised."

The inquiry also heard that Sir Gus O'Donnell, who was then Major's press secretary, prepared the prime minister a briefing note ahead of the 1993 meeting.

The note said Murdoch's papers had "made matters worse" and "ceased to make rational criticisms of policy and are now simply anti-everything and me [Major] in particular".

O'Donnell's note said this was "bad for economic confidence and hence bad for business" with longer-term political repercussions that were "difficult to assess".

It went on to say that Conservative MPs "now see no reason to be helpful to the media" and said MPs from all parties were becoming increasingly attracted to issues such as privacy rules, VAT on newspapers, and cross-media ownership. Jay suggested to Major that it sounded like a "scarcely veiled threat".

"Well it was," replied Major. But he said it was not the sort of thing a prime minister should have been saying, and he had never said it to Murdoch. "I'm sure Mr Murdoch would have remembered," he added.

Major also had six meetings with Conrad Black, then owner of the Telegraph titles, during his seven years in office.

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